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Marketing fund statements

If there is a marketing fund, a franchisor must give a franchisee:

  • the annual marketing fund financial statement
  • an auditor’s report of the marketing fund financial statement, unless enough franchisees agree not to have it audited.

Disclosure document and key facts sheet

A franchisor must provide a current disclosure document and key facts sheet to any franchisee who asks for the disclosure document.

A franchisee can ask for a copy of the disclosure document once every 12 months. The request must be made in writing.

Franchisors have to fulfil the request within:

  • 14 days, or
  • within 2 months of the request being made, if the franchisor was only required to update the disclosure document for the relevant financial year because the franchisee requested a copy of it.

When there is a change to materially relevant facts

If certain important details about the franchise system change any facts that are 'materially relevant' and this information is not in the disclosure document, the franchisor has to let franchisees or potential franchisees know about it.

The franchisor usually has to do this within 14 days of becoming aware of the fact and the information must be provided in writing.

Materially relevant facts are defined in the Franchising Code of Conduct and include things like:

If the new fact relates to the franchisor’s financial details and a person is about to sign a franchise agreement, the franchisor must give the potential franchisee a copy of the new statement, declaration or document as soon as possible and before they enter into the franchise agreement.

When the franchisor requires other agreements to be entered into

Sometimes as part of the franchise agreement the franchisor requires the franchisee or people involved in the franchisee business, such as directors, to enter into other agreements. 

When this occurs, the franchisor must provide copies of these agreements 14 days before a franchise agreement is signed or when the agreements are available. 

Examples of other agreements

  • Hire purchase agreement
  • Guarantee
  • Loan agreement
  • Confidentiality agreement
  • Lease, other than a lease of the franchise premises.

Leasing agreement requirements

If the franchisee will have a lease or occupancy agreement with the franchisor for the premises, the franchisor must give them specific information in addition to giving them copies of those agreements.

Franchisors have to give franchisees certain documents and information if they're occupying or leasing premises for their franchise from the franchisor or an associate of the franchisor.

This includes:

  • a copy of the lease and if applicable, occupancy agreement
  • information that the lessor must give to a lessee under the relevant state or territory retail tenancy laws
  • information about any incentive or financial benefit that the franchisor or its associate gets because of the lease or occupancy arrangement.

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